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Friday, June 27, 2014 9:10 PM


Three More GM Recalls Today: When Will It End?


In a seemingly unending series of recalls, GM announce three more recalls today. This set involves pickup trucks, SUVs, Corvettes, and police cars.

With every announcement, I wonder "Is this the last?"

But here we go again.

The Wall Street Journal reports GM Discloses Yet Another Recall.

General Motors Co. disclosed three new recalls on Friday covering more than 473,600 vehicles, including some of its latest Corvette sports cars, amid stepped up safety reviews.

The nation's largest auto maker recalled 466,940 full-size pickup trucks and sport-utility vehicles to recalibrate software in the transfer case which may electronically switch to neutral without input from the driver. GM said it is not aware of any crashes or injuries related to the problem. The recall covers certain model years of the Chevrolet Silverado, GMC Sierra and SUVs including the Chevrolet Tahoe.

n a second recall, GM said its dealers will inspect, and replace if needed, the windshield wiper module assembly in about 4,800 of the 2013 and 2014 model year Chevrolet Caprice police cars and 2014 Chevrolet SS sport sedans. If the motor gear teeth become stripped, the wipers may not operate. GM said it isn't aware of any crashes or injuries related to this issue.

Lastly, dealers will replace the two rear shock absorbers in 1,939 of the 2014 model year Chevrolet Corvettes in the U.S. due to the potential cracking. GM said it is not aware of any crashes or injuries related to the problem.
20 Million Recalls and Counting

GM's recall total has now reached 20 million. Clearly GM wants to get every conceivable bit of bad news regarding recalls out of the way. Thus, I suspect the end of recalls is near.

Auto Bad News Over?

Is all the auto-related bad news out of the way?

Not quite.

Here are a few of my recent comments on autos from Consumer Spending Weaker Than Expected, Autos Still Holding Up; What About Housing?
Durable Goods and Autos

  • Purchases of durable goods increased 1.0 percent, in contrast to a decrease of 0.9 percent in April. 
  • Purchases of motor vehicles and parts accounted for more than half of the [durable goods] increase in May, and more than accounted for the decrease in April. 
  • Purchases of nondurable goods decreased 0.3 percent in May, compared with a decrease of 0.1 percent in April.  
  • Purchases of services decreased 0.2 percent, compared with a decrease of 0.1 percent.

Services down two months in a row as are nondurable goods.
Was the weather bad in April and May too?

What little strength left in the economy is related to autos. Auto sales bounced back after a decline in April.  How long can this last?
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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